Ponty Chadha case: Raid fiasco shook up income tax department

NEW DELHI: Income tax search operations rarely cause a shake-up in the finance ministry of the kind that followed raids at the premises of liquor baron Gurdeep 'Ponty' Chadha in February, on the eve of the UP polls. For all the media teasers about the discovery of secret vaults, the exercise yielded nothing of consequence, leading to insinuations that the tycoon was tipped off by an insider.

The suspicion was strengthened when the I-T officials deputed to raid a sugar factory owned by Chadha's kin in UP's Gajraula discovered that the management was ready to welcome them on their supposedly 'surprise' inspection. Perhaps, it was too much to expect the street-smart businessman to hoard cash on his premises when the Election Commission was exhorting government agencies to sniff out black money funding the UP polls. Yet, such was the controversy that the then member-investigation in the Central Board of Direct Taxes (CBDT), SS Rana, who planned the raids across 25 locations in different cities, was removed, strengthening the impression that the department had botched up the exercise.

Sources in the finance ministry say it was perhaps the first time when a revenue secretary wrote an elaborate note to the minister seeking to divest the CBDT member-investigation, one of the most sensitive posts in the finance ministry, of his portfolio by leveling serious charges against him.